Musings in the life of an internist, cardiologist and cardiac electrophysiologist.

Friday, August 24, 2012

A Value Proposition: What Am I Worth?

Recently I was asked to serve as a consultant on a medical matter. Interestingly, they requested my hourly price for my services. I thought about this and wondered, "What am I worth in per hour in the open market?"

It is an interesting question to ponder.

I have decided to ask the blog-o-sphere. Call it a bit of "free market economics." For the record, 100% of my hourly wage for my services will be sent to our cardiovascular research fund at our hospital to avoid any conflict of interest. I will not see ANY of the money the blog-o-sphere decides personally, but I really want to know what people think.

So where to begin?

Should I compare my hourly wage to MGMA standards for the annual physician salary of a physician of my subspecialty? If so, do I pick the 50% percentile, 25th percentile, 75th percentile, or 95th percentile? On what basis do I have to assure this is a fair price? Who sets this price? Are these data accurate or based on earlier years' hospital data and physician surveys? Can I verify that their hourly price is justified? If so, how? Or are their data proprietary?

Or should I compare my hourly wage to other advanced medical professionals like cardiothoracic surgeons or neurosurgeons?

Or maybe, since primary care doctors are the most numerous physicians out there and I want to be fair, I should calculate my price based on their salaries? Again, do I base my price on where I live and what I guess primary care doctors are making these days? Should I base my price on their estimated gross salary or net salary?

Or maybe I should consider setting the price relative to some really smart hospital CEOs or COOs? Should I compare my hourly price to theirs? After all, they carry some pretty big responsibilities managing all those lives, too.

Or maybe I should take it a step further. Maybe I should set my hourly price to others in the pharmaceutical, insurance, or medical device industry. Wow, I wonder what their hourly price is if one considers not only their salaries, but benefits, stock options, and the like? Our research fund might rock, then! But at the same time, maybe this number will be too high and result in me losing the opportunity to consult. Should I worry about this?

Or (what the heck), maybe I should I compare my hourly wage to a pro baseball player or a pro basketball player? We're professionals too, right?

Or maybe I should ask a patient who received a pacer from me at two in the morning and got through it fine, without an infection or other complication and lived to see another day what they think I should be paid.

Then again, maybe I should factor in not just what my price should be now, but what my price will be in 2014 when 30 million more people are added to our health care system and doctors are in short supply.

Seriously. What do YOU think a doctor who is board certified in cardiac electrophysiology, cardiology and internal medicine with almost twenty years of medical experience charge to consult on a per-hour basis?

Think about it but be sure to justify your price per hour. Then put it in the comments. I'll try to post your thoughts as fast as I can, given today's clinical constraints.

Ask yourself, am I willing to give up an hour of free time at this price? Turn it around, would I buy an extra hour of free time at this price?

Is this something you would enjoy more than my day job? If so, maybe you would work for less.

Take a gamble - do they really want me and only me, or will another EP do fine as well?

Finally, make a guess at what a similarly qualified person would be willing to work for (or ask around).

The market price for an hour of your time (sorely missing from any medical field) doesn't depend on how many years you went to school, how much your training cost, how many student loans you have, or how many hours you've spend at the hospital in the past 10 years.

It all comes down to what the customer is willing to pay and what other similarly trained people are willing to accept.

Great question. Since I have no idea what the number will be, I'm not sure. I could have donated to a charity, I suppose, but offering money to our research fund which is constantly trying to stay afloat seemed just as reasonable to help others. I could have chosen anyone.

I could have kept the money myself, but elected to offer it to our research program. Since I am an employee of a large hospital system who does NOT control how the money is spent, I (personally) do not think this poses a conflict of interest. I am, however a paid employee of that system (yep, I get a salary from them.)

I can tell you that the group involved has no financial ties with the hospital to my knowledge.I'm wondering, where do you think the conflict lies (especially since I am transparent about this and have prospectively defined where the funds will be used)?

It doesn't sound like there is a conflict here. You had brought that up in your original post as a reason to donate the money.

I like the way Joe thinks about this. You have a service. Others find what you do of value and the free market works itself out. What you wish to do with that money is your business. While it is honorable that you wish to donate it to a cause you believe in, it would entirely reasonable to keep it for yourself (perhaps to help pay for your kid's education or a nice dinner out with your wife).

As doctors, we should not have to apologize for wishing to make a living for the work we do. We're certainly getting the squeeze from outside. It's not unreasonable to find alternative sources of income as long as they do not conflict with our mission of delivering high quality health care free of financial conflict.

The health care industry needs input from experts such as yourself. There is no reason doctors should have to donate these services.

Seventy-five years ago you might have got a great fried chicken dinner with all the trimmings from a grateful Mrs. Smith....

Lets face it, today you can charge whatever the patient and insurance company will tolerate. So charge ten thousand an hour and settle for $500... Still a pretty good salary.

Wonder what the guy who discovers a new life saving drug gets per hour? Its all relative I suppose... Maria Carey gets twenty million a year to show off her hooters and judge singers. Its a strange world.

So, I'm (now) a plaintiff's medical-malpractice attorney. For several years, I defended providers in malpractice claims. I've worked with experts like you on both sides. And while I won't wade into the waters of what you're "worth," (and I'd appreciate if you don't tell me how much I'm "worth" because I'm afraid of the low number I'd surely inspire), I will say one thing:

From my perspective, that you intend to donate your income to the hospital's research is a great sacrifice and a shrewd choice. You'll be a much more credible witness if and when it advances to trial if the jury knows you didn't review the case just because you wanted to make some more money this fiscal year. No matter your opinion, the jury and lawyers will all respect your opinion more if your hard-earned dollars don't go directly to you. That probably isn't fair, but I submit that it's true.

Good luck on finding what you're "worth." I suspect it is a number larger than you might have initially suspected.

Worth is so relative. Fortunately (maybe) we have people who are skilled in figuring such things out: How much does the life insurance company give us for the loss of an arm? A leg? How much can we get for a disabling injury or car accident? Some may settle got far less than they could get. Others will settle for nothing less than millions. For some it's a game. For others, to teach a lesson or punish. I don't think much of the morality of charging what the market will bear. The doctors I work with want to live and take care of their patients. That's what you want, too. That's why the current health care situation is so troubling: It's not right for anyone. It doesn't value anyone rightly.

The only person who can correctly value what you do is you, as Kipling said (roughly remembered) keeping your head when all those around around you are not. Oh, yeah, maybe another person: The husband who's wife of 7 years will be around to enjoy watching their children grow up together beside you corrected her tachycardia. He can give his thoughts about what your services are worth, too.

Interesting. Nine comments but only one figure. It was also the figure that occured to me: $500/hr.

It seems market-right. I think the insurance company will pay that (chicken feed in comparison to the hospital bills) and it won't seem obscene to the guy with the sick wife with a ton of associated medical bills. AND THE INSURANCE COMPANY DOESN'T GET TO NEGOTIATE THE PRICE. I assume the consult will take an hour or two. Maybe three, with reports. Calculated the way most Americans calculate their compensation, it is a salary of $1M/yr. Pretty OK.

Modern Healthcare (via a reference in a work.chron.com article that came up on a Google search just now) had the top end of the salary range for invasive cardiologists at just under $500,000 per year. It was a survey from a year or two ago, 2010 I think. (There were three specialties slightly above that in top end of the range numbers.)

If we assumed just for simplicity sake a 40 hr. work week for 50 weeks, so 2,000 hours a year, it would be $250 per hour to get to the $500,000 per year salary. Doubling the $250 per hour to $500 seems reasonable to account for overhead and insurance and markup that the hospital or employer paying the salary charges (but in this case would presumably be the cardiologist personally).

So that would be another way of arriving at the same $500 per hour that other commenters have. Since it was based on the top end of the Mordern Healthcare range for invasive cardiologists, it would reflect more the major market with 20 years experience.

This occurred a few years ago. A heart center built a new EP lab and hired a EP to run it and oversee the new staff. He was given a $50k signing bonus and a yearly guarantee of $450K. Who knows what the future holds...

since you are donating it you are donating your time so your time is worth nothing to you but $500 (or whatever) to the people hiring you. You make enough to donate it.. so you are beyond the level where you have to charge anything.. it is enough to have it go to a good cause. Nothing wrong with that.. just reflects that about 90% of us are paid more than we need.. it's an unfair world but I'd rather do what I do for $50 an hour then what the guy laying sod or painting or mowing grass or soliciting door to door or working at a chemical plant or any of the other jobs I did before doctoring.. for $75 an hour.. I'll take doctoring for $50. Research, such as it is, shows happiness is not very well correlated with $.. (at least above a certain point.. $70000 as I recall).

Some of these comments are disgraceful. One would think the Hippocratic oath extends to preventing your "customers" from going bankrupt for accepting your help.

Health care is not a free market, no matter how much doctors and insurance companies wish it was. Free markets only function if they are, in fact, free. A consumer who can choose between paying you or dying doesn't have a meaningful choice. Therefore the prices you can get for your services are severely distorted and can never be "market-correct."

There's nothing wrong with wanting to make a living or even wanting to get rich but there IS a point where squeezing a captive market becomes highly unethical and immoral, especially when the squeezers become a self-reinforcing clique of echos.

For 20 years experience, a professional certification and an uncommon set of skills, $150 per hour is generous. It would hover near $100 if patients had the option to choose not to have treatment.

IT isn't that hard to figure out what I think I'm worth. It IS hard to figure out what other people (i.e. those who employ me) think I'm worth.

If we're talking just me, no overhead at all, enough to cover all of my personal expenses (everything from mortgage to packs of gum to keep my breath fresh during a 12hr ER shift to my kids' 529 donation) and then add 75% to it. Why not? My ophthalmologist friend marks her glasses at 300% of cost in her optical shop and people pay that gladly. I figure at 75%, I'm a bargain.

As an aside, malpractice lawyers earn their money the hard way. Haven't had to employ their services yet... but I treat them all with respect because there is no telling which patient didn't like the fact that I won't give them more and more (and more) dilaudid.

"A consumer who can choose between paying you or dying doesn't have a meaningful choice..."

"..if patients had the option to choose not to have treatment."

The patient ALWAYS has a choice to refuse treatment. The last 20 years have proved that. I've had patients walk out of the ER in the middle of having a heart attack. What do I do to stop them? I use my words. If they still keep walking, I document the heck out of it and move on to the next patient.

"There's nothing wrong with wanting to make a living or even wanting to get rich but there IS a point where squeezing a captive market becomes highly unethical and immoral, especially when the squeezers become a self-reinforcing clique of echos."

Excuse me. I work in a field where I am LEGALLY UNABLE to turn away anyone who doesn't want to pay for my services, where my overhead is more than my pay, and a single mistake - or just an irritated patient - can cost me not only money, but my house, my ability to ever practice again, and garnish my wages at whatever job I'm able to scrape together afterwards.

That just the legal aspects. That doesn't count the moral and ethical aspects, which can also be used to as the basis of lawsuits.

Disgraceful? No, what is disgraceful is:1. the with all of the recent changes, the tort process STILL hasn't had any meaningful reform.2. the US public is being fed fluff about midlevel providers doing as effective a job as physicians,3. the middle-men (insurance and billing companies) seem to have gotten off scot-free.

About Me

Westby G. Fisher, MD, FACC is a board certified internist, cardiologist, and cardiac electrophysiologist (doctor specializing in heart rhythm disorders) practicing at NorthShore University HealthSystem in Evanston, IL, USA and is a Clinical Associate Professor of Medicine at University of Chicago's Pritzker School of Medicine. He entered the blog-o-sphere in November, 2005.
DISCLAIMER: The opinions expressed in this blog are strictly the those of the author(s) and should not be construed as the opinion(s) or policy(ies) of NorthShore University HealthSystem, nor recommendations for your care or anyone else's. Please seek professional guidance instead.